Eastman Chemical will increase prices

On September 14, 2017, Eastman Chemical (EMN) announced that it’s increasing the prices of Esters and Alcohols. The price increase will be effective on October 1, 2017, or as the contract allows. The price increase will be in the North America and Latin American region. The price increase is primarily due to an increase in raw material prices. Below are the details of the price increase:

  • The prices of N PROPYL ACETATE, BU will increase by $0.05 per pound.
  • The prices of N PROPYL ALCOHOL, BU will increase by $0.05 per pound.
  • The prices of SOLVENT BLEND 8020, BU and SOLVENT BLEND 9010, BU will increase by $0.05 per pound.

Eastman Chemical Hikes the Prices of Esters and Alcohols

The impact of the price increase will be more visible in 4Q17. The price increase could have a positive impact on Eatman Chemical’s revenue—assuming that the volumes don’t drop. In 2Q17, Eastman Chemical reported revenues of 2.42 billion—compared to 2.30 billion in 2Q16.

Eastman Chemical’s stock performance

Eastman Chemical had a positive week. Its stock rose 0.8% for the week ending September 15, 2017, and closed at $84.96. Eastman Chemical traded 2.40% higher than the 100-day moving average price, which indicates the upward trend in the stock. On a year-to-date basis, the stock has risen 13.0%. Analysts forecast more upside in the stock and expect the stock price to be at $93.40 in the next 12 months, which implies a potential return of 9.90% from the closing price on September 15, 2017. Eastman Chemical’s relative strength index of 50 indicates that the stock isn’t overbought or oversold.

Investors looking to hold Eastman Chemical indirectly can invest in the ProShares Ultra Basic Materials (UYM), which has invested 1.30% of its portfolio in Eastman Chemical. The fund’s other holdings include Monsanto (MON), Praxair (PX), and LyondellBasell (LYB) with weights of 5.20%, 3.90%, and 3.20%, respectively, as of September 15, 2017.

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